Central banks in the U.S. and Canada have been busy in recent months, enacting cuts in key interest rates as inflation levels cool to target levels. The Bank of Canada has been more dovish about the cuts compared to the U.S. Federal Reserve amid trade tensions. However, it is clear that the Bank of Canada will continue taking measures independently of its counterpart south of the border.
Now, September is typically a profit-taking time for seasoned investors, especially after sizzling gains during the hot summer months. The last few months have seen the Canadian stock market reach new all-time highs. As of this writing, the S&P/TSX Composite Index, the benchmark index for the Canadian stock market, is up by over 30% from its 52-week low, hovering just below the latest all-time highs.
After such a solid bull run, we might still see more interest rate cuts in the coming weeks, especially as inflation stays at lower levels. Almost halfway through September, you might still be wondering whether there will be significant sell-offs this September or if the bull run will continue.
Either way, it’s important never to try to time the market because it almost never works out the way you want it to. Having a successful career as a stock market investor means prioritizing a sound long-term strategy that ignores trivial short-term market movements for more significant gains down the line.
If you want to look past the noise and make long-term investments, here are two TSX stocks to consider.
Canadian National Railway
Canadian National Railway Co. (TSX:CNR) is an $83.49 billion market-cap giant in the highly consolidated Canadian railway industry. The Montreal-headquartered railway company serves Canada, the Midwestern U.S., and the southern United States. While the railway sector might not seem as exciting compared to artificial intelligence (AI) stocks, its history might make you beg to differ.
Transporting everything from crude oil to grain, lumber, and manufactured goods, CNR has been the backbone of the North American economy for decades. Its transcontinental network spans from the Pacific to the Atlantic, going deep into the U.S. Gulf Coast positions. Tailwinds see it drive more growth through infrastructure growth, and headwinds show its resilience. It has raised dividends for almost 30 years with a 13% compounded annual growth rate (CAGR). As of this writing, CNR stock trades for $133.76 per share and is too attractively priced to ignore.
Alimentation Couche-Tard
Alimentation Couche-Tard Inc. (TSX:ATD) is a $72.16 billion market-cap Laval-headquartered company that operates convenience stores across Canada and several international markets. Boasting almost 17,000 locations worldwide, the convenience store operator has been continuously expanding its presence. A classic growth-by-acquisition success story, it expects to make more announcements for deals that will further expand its portfolio.
As of this writing, ATD stock trades for $76.24 per share, with a 20.35 price-to-earnings ratio, which suggests it is cheap right now. While ATD hasn’t done many acquisitions recently, the company is setting itself up for more growth in the coming weeks. I think it might be the perfect time to invest in its shares as lower interest rates become the tailwind it needs to deliver further growth.
Foolish takeaway
When it comes to investing in growth stocks, flashy companies boasting exciting short-term returns might seem attractive. However, truly successful investors look at the bigger picture, with potential for substantial total returns over the next few years instead of the next few weeks. To this end, investing in CNR stock and ATD stock can be an excellent way to put your money to work in the stock market right now.
